$55 Million New Market Tax Credit Allocation Announced to Support Key Projects in South and West Side Neighborhoods
Mayor Lori E. Lightfoot today announced a $55 million New Markets Tax Credit (NMTC) allocation to the City of Chicago will support efforts to revitalize the West, South, and Southwest sides, including the INVEST South/West community areas.
Allocated by the U.S. Department of the Treasury to the City’s Chicago Development Fund (CDF), the tax credit allocation will be used to finance manufacturing, mixed-use, and institutional projects that create jobs and provide needed services in low-income neighborhoods.
“These federal tax credits can support new grocery stores, industrial facilities, health clinics, and similar types of projects that our under-invested neighborhoods want and need,” Mayor Lightfoot said.
Established by Congress in 2000, NMTCs enable banks and other investors to receive credits against federal income taxes in exchange for qualified equity investments in community development entities (CDEs). The CDEs use the proceeds to provide gap financing to proposed development projects.
“CDF will allocate the NMTCs to eligible projects in communities that lack access to capital investments that help to grow businesses and create jobs,” according to CDF Chair Maurice Cox, who is also Chicago’s Commissioner of Planning and Development.
“The tax credit allocation can support approximately six major developments on the South, West, and Southwest sides,” Cox said.
CDF is one of 76 community development entities to receive an allocation from a pool of 206 applicants nationwide as part of a competitive process run by the US Treasury in 2019. In addition to city-affiliated groups such as CDF, applicants include banks, nonprofit lenders, state economic development agencies, and others. Only a handful of cities received credits in this round, and CDF’s award is the largest of any city-affiliated CDE.
CDF has received six prior NMTC allocations totaling $356 million that helped raise $111 million in eq-uity to support 35 projects valued at $760 million. CDF’s most recent allocation was in 2016. The pro-jects, which include a range of retail centers and health and educational facilities, have helped to create and retain 5,500 full-time equivalent jobs in Chicago and serve approximately 172,000 people with vital community services. Recent developments supported by NMTCs include the Jewel-Osco grocery store in Woodlawn, the Esperanza Health Centers clinic in Brighton Park, and the Flex-N-Gate auto components manufacturing facility in South Deering.
The Chicago City Council established CDF in July 2005 as an Illinois non-profit corporation that allocates NMTCs to eligible projects across the City. Interested developers seeking to apply for the credits may visit the CDF web site at www.chicagodevelopmentfund.org.
INVEST South/West is an unprecedented community improvement initiative under Mayor Lightfoot to marshal the resources of multiple City departments, community organizations and corporate partners to-ward 10 neighborhoods on Chicago’s South and West sides.
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